From our archive. This article was published on 28 July 2020. Rules and amounts may have changed since.
Everyone has experienced that sinking feeling at some point when something happens that you know is going to cost you a lot of money and that you are totally unprepared for. It could be a medical emergency, a large bill or damage to something valuable that is not covered by insurance.
Whatever it is, there are a few steps that can help you tackle the problem financially:
1. Get started straight away
When something bad happens, it can be tempting to shut yourself off from it and ignore it for as long as possible. But the sooner you get started, the sooner you will be out of debt again. Acting quickly can help prevent things from getting worse before they get better.
One of the first steps you may be able to take is to check whether the insurance policies you have can cover your costs.
2. Evaluate your options
Do you have savings, an emergency fund or a credit facility you can fall back on? If so, now may be the time to use them.
If not, can you get help? If it is a large bill, an arrangement can be made with your supplier, or if it is, for example, a large medical expense, it may be worth talking to your family to see whether someone can bail you out.
Another option is an overdraft facility (temporarily going into the red), a credit card or a personal loan that can help you cover the costs temporarily. However, these will come with an interest rate and possible fees. If you are considering a loan, take the time to draw up a repayment plan so that you know exactly how much you have to repay and when you will be finished with the repayments. Before making a decision about borrowing, you should be aware of all the possible costs and risks.
3. Make a plan
Once you have decided how to deal with the costs, draw up an action plan with the various steps you need to go through.
If you use your savings, this can be the plan for how to get your savings back to the level you had reached before the financial setback occurred. If you borrow money or pay the costs back over time, this becomes your repayment plan.
4. Talk about it
Everyone is different, but it can be useful to talk to someone about the costs. It could be a partner, family or a friend, as long as it is someone you trust.
Talking about it can help to reassure you and make you more aware of what you are going to do. If you feel comfortable, share your plan with them and ask them to check with you from time to time that you are on the right track.
If you have debts, the first important thing is to know which debts you have and how large they are. That way you can see where your problem lies and what you can do about it. That is why an overview of your income and expenses can be a great help if you want to examine your debts. With a budget plan, you can try to plan income and expenses over a longer period and in this way also try to organise the repayment of your debts. With our budget planner you can easily put together an overview of your income and expenses. Anyone who needs advice and guidance with budget problems can turn to the social services of their local authority or a recognised debt counselling service. On the website eerstehulpbijschulden.be you will find a recognised debt mediation service near you. You will also find more information there about dealing with debt. (Source: https://www.vlaanderen.be/hulp-zoeken-bij-financiele-problemen)
You can of course also enlist a financial well-being coach to help you with this. Some of our coaches are even specially trained as budget coaches. Click here to contact the coaches of the Financial Well-Being Academy. Or, without obligation, contact one of our staff members via this link. We treat every message in confidence and put you directly in touch with someone who can answer your questions or point you in the right direction.